Cash Flow Rights, Control Rights And Performance Of Private Listed Enterprises

With the development of the privatization, more and more private listed enterprises emerged in China. And behind the development of these firms, there are many problems, which we must pay more attention to. Just like the firms in Southeast Asia and West Europe, most private listed enterprises in China are also controlled by families. In order to control more resources, they constructed a complicated structure to separate the cash flow rights and control rights by Pyramidal structure, Cross-Ownership and Dual-Class Equity, and they can expropriate the minority shareholders through funds appropriation, transactions between related companies and external assurance. The legal protection to the minority shareholders is poor, so they are in a more dangerous situation. It is very important for us to research the private listed enterprises which are in a situation that the cash flow rights and control rights are separated.In order to analyse the influence of ultimate control shareholders'cash flow rights and control rights on the performance of private listed enterprises, the paper investigates the ultimate controlling shareholder by tracing the control chain to find who has the most voting rights, and discusses the correlativity between cash flow rights, control rights and the performance of private listed enterprises at different control levels. The paper indicates that the ultimate controlling shareholders'cash flow rights are significantly associated with higher corporate performances at low control level, and the correlativity is not significant at high control level. This paper also finds that the ultimate controlling shareholders don't want to control the company absolutely, and they can control the companies with fewer and fewer cash flow rights by analyzing the data from 2002 to 2005.This paper amounts to five chapters. Chapter one is the introduction. It introduces the thesis research background and meaning, economics foundation and method, main contents and frames, domestic and international present research situation.Chapter two is theory analyses. It introduces the basic theory, basic definitions of the cash flow rights, control rights and their influence on the performance of private listed enterprises. Finally, it gives the study hypothesizes.Chapter three is a development of the private listed enterprises. It introduces the changes of the ultimate controlling shareholders'cash flow rights and control rights from 2002 to 2005, and it makes cross section analysis based on the panel data in 2005.Chapter four is demonstration analyses. It validates hypothesizes above, by the methods of descriptive statistics, compare means and regression, depended on the real data of the 381 private listed enterprises in China.Chapter five is results, future study and advices.